Although it's not always easy to predict the operation of competition law in relation to commercial agreements, it's worth considering certain points when drafting or reviewing an agreement. It's important to identify whether the competition law prohibitions are likely to apply and, if so, whether they can be avoided.
Chapter I of the Competition Act and Article 101 of the Treaty on the Functioning of the EU (TFEU) might not apply at all to an agency agreement if one or more of the following statements is true:
An agency agreement will probably have to be treated in the same way as a distribution agreement if none of the statements above applies.
Chapter I and Article 101 might not apply if one or more of the following statements are true:
When drafting an agreement it's always a good idea to get the benefit of Vertical Agreements block exemption whenever possible (see).
Chapter II of the Competition Act and Article 102 of the TFEU are far less likely to apply to individual commercial agreements than Chapter I and Article 101. However, they mustn't be ignored, especially if one of the parties has a large market share. Bear in mind that if Chapter II of the Competition Act applies, the only escape from fines is if the conduct is of minor significance. If Article 102 applies, there's no way to avoid breaching it.
When considering the application of Article 102, the following questions will be relevant:
If the answer to all of these questions is yes: